My Social Business Predictions for 2003 (not a typo) – Part 2

Most of today’s organizations are powerful productive machines, which were founded and grew up during an era where mass production was the norm, and planning was the course of action. This era is over for good, and social business, or enterprise 2.0, or connected company, or whatever you want to call it (the level at which most people from this field do not want to be tagged with a specific term is amazing) aims at building and providing an actionable business framework for our times ridden with complexity.

To survive in a more and more unpredictable environment, to thrive in economically challenging times, organizations must reinvent themselves at every level. On the internal side, they have to leverage business nimbleness by adopting more modular and networked structures (to become what Dave Gray calls podular companies), and empower the individual creativity and intrapreneurial spirit of their workforce. On the other side, they must learn to deal with versatile, over-informed and hyper-connected customers.

Pushing business-as-usual to new heights

On both sides of organizational boundaries, social technologies offer the mean to connect people in a transparent and purposeful manner, whether it be to accelerate learning and knowledge sharing, to leverage innovation at business level, or to engage with customers to nurture relationships. The benefits of becoming “social” seem obvious enough for anyone to jump in at once. Yet, as Irving Wladawsky-Berger commenting a recent Forrester study, stated:

“Companies are making investments in social platforms and technologies, but, in general, their efforts remain haphazard and disjointed. They may succeed within individual silos of the business, but they are not fully realizing the potential power of becoming a social business“.

We may, of course, keep on concentrating on enlightening case studies, on these very few companies which really walk the talk, and show them as examples to the -huge- rest of the business world. But fact is that what we qualify as a success is too often a successful attempt to enforce a harder, better, faster business-as-usual. In the “social” model many celebrate, organizations keep on assuming that people can easily be split into two groups: employees (resources for production) and customers (resources for consumption), and that the relationships which link these two groups are of transactional nature. Engaging customers means more sales, empowering employees means smoother processes. They are looking for the same business, powered by social.

Beyond exception handling

Let us get clear. Organizations do not need to become social because of a need to better engage customers on their own channels, or because of an urgent need to better deal with exception handling in process-based operations, but because of a major societal shift. Not only must they adopt new ways of selling products and services, but they have to consider what and why they sell at the light of the change at work under our eyes.

This change is affecting every aspect of our life: politics, economy, culture… and cannot be resumed to technology and collaboration. As Manuel Castellswrites:

“Why now? The answer lies in the simultaneous availability of new, flexible information technologies and a set of historical events, which came together by accident, around the late 1960s, and 1970s. These events include the restructuring of capitalism with its emphasis on deregulation and liberalization; the failed restructuring of statism unable to adapt itself to informationalism; the influence of libertarian ideology arising from the countercultural social movements of the 1960s; and the development of a new media system, enclosing cultural expressions in a global/local, interactive hypertext. All processes, interacting with each other, favoured the adoption of information networks as a most efficient form of organization. Once introduced, and powered by information technology, information networks, through competition, gradually eliminate other organizational forms, rooted in a different social logic.”

In this hyper-connected society, the purpose of businesses is still to create and serve customers, and to create profit from it in order to survive, as asserted Peter Drucker in 1954 in The Practice of Management. But the very notion of what a customer is, wants and needs has drastically changed. To further quote Castells:

“Mass consumption was predicated upon standardized production, stable relationships of production, and a mass culture organized around predictable senders and identifiable sets of values. In a world of networks, self-programmable individuals constantly redefine their life styles and thus their consumption patterns; while generic labour just strives for survival.”

Serving the needs of people whose purpose and behaviors constantly change according to their environment cannot be sustainably achieved any more through structures and mechanisms built for mass consumption. The marketing function is tackling this evidence head on: the Service-Dominant logic, conceptualized by Steve Vargo and Robert Lusch, gives new keys to better understand the relationships between companies and customers. Service design aims at understanding customers job-to-be-done from their point of view, and to shape business propositions accordingly.

Serving customers as a wicked problem

Caring for hyper-connected customers supposes new rules, and new organizational paradigms. Doing business in this context exhibits all the characteristics of a wicked problem: there exists no shared understanding of customers’ needs, selling is more and more a “one-shot” solution with uncertain outcome, and the context of the relationships between a brand and a customer constantly evolves over time. In this new world, old approaches do not work anymore. Organizations must adopt social at a higher level, and embrace a new set of managerial and operational paradigms in order to survive:

No boundariesIn order to understand their customers, companies need to “crawl into their skin and go with them as they go about their day“, as Clay Christensen says. This only can be achieved if customers are taken for what they are: active stakeholders of the organizations they interact with. Thus, organizations should move their whole gravity center out of traditional boundaries to where transactions really happen: in the middle of the civil society, and get involved in all the dimensions of this society. Commercial exchanges are no more only consumption activities; they originate in deep personal as well as collective experiences in which every stakeholder takes part.

Trusted exchangesWhen customers constantly redefine their behaviors, trusted relationships become crucial, and should influence how business is done, allowing companies to react and reshape their value proposition accordingly. Customer-centricity is still mostly viewed today as an inside-out attitude, and is considered as long as it doesn’t challenge the way businesses operate. Yet, real customer-centricity must go beyond empathy, and become trusted exchanges, symbolic as well as material, between equally weighted partners.

A culture of experimentation
Developing trusted exchanges goes on pair with the will to share, not only knowledge, but also feelings and emotions, and to be able to learn from experience. Learning is a continuous, albeit non linear, process, which can only be leveraged in an environment where experimentation and some level of oddity take place.

Emergent and adaptive structures
More than 80% of people now live in urban areas, and 75% of economical activities of the countries where the industrial revolution took place are services. In this context, the Taylorist structure of work that prevailed in the industrial era do not need to apply anymore. By embracing more emergent, network-based, structures, by focusing on innovation and adaptive leadership, organizations will allow themselves to better deal with the constant and unpredictable changes they are facing today. Tapping into networks’ power means more than giving them a purpose to follow, it means allowing them to follow their own purpose.

“The future has already arrived. It’s just not evenly distributed yet“ supposedly said William Gibson. Let us just make sure that today’s organizations get armed to operate in today’s world, not in an era bygone for good. Let us just be sure they really understand what is at stake in becoming social.